Dollar Falls in Europe as Bullion Prices Rise
The U.S. dollar fell against all major currencies in late European trading Friday. Gold prices rose.
Dealers in London said there was a round of late selling following a forecast by Henry Kaufman, chief economist at Salomon Bros. Inc., that the U.S. discount rate will be cut by January. The discount rate is the interest rate charged by the Federal Reserve Bank on loans to commercial banks.
Dealers said the dollar was also depressed by reports that U.S. monetary authorities aren’t yet satisfied with the appreciation of the Japanese yen and the West German mark and want to see the dollar lower against these two key currencies.
Little Support
“The dollar isn’t finding any support apart from a little profit taking,” said one dealer in London.
A foreign exchange banker in Frankfurt, West Germany, said dealers expect the dollar to fall even further as interest rates in the United States decline towards the end of the year.
In London, the dollar lost just over 1 cent against the British pound. In late trading, it cost $1.45325 to buy one British pound, more expensive than the $1.4430 it cost late Thursday. Last Friday, it cost $1.4222 to buy one pound.
Earlier in Tokyo, the dollar closed at 201.75 Japanese yen, down from Thursday’s close of 202.00 yen. Last Friday, the dollar was quoted at 203.35 yen.
Other Late Rates
Other late dollar rates Friday, compared with late Thursday (with last Friday’s rate in parentheses): 2.5875 West German marks, down from 2.5888 (2.6220); 2.11625 Swiss francs, down from 2.1235 (2.1490); 7.8775 French francs, down from 7.9025 (7.9750); 2.9095 Dutch guilders, down from 2.9165 (2.9510); 1,745.30 Italian lire, down from 1,751.50 (1,771.00), and 1.3763 Canadian dollars, down from 1.3765 (1.3765).
Gold bullion prices rose in a late surge. In late trading in London, gold was quoted at a bid price of $327.90 an ounce, up $2.30 from late Thursday.
In Zurich, Europe’s biggest gold market, gold closed at $328.00 an ounce, up $2 from Thursday’s close.
